It is an important week for Sterling with a number of releases due that are likely to shape the direction for Sterling against the US Dollar and the Euro.

GBP/USD

We have inflation figures released tomorrow in the form of CPI (YoY) and (MoM) July. We have Retail Sales following this on Thursday rounded off by Public Sector Net Borrowing on Friday.

Up or down for GBP/USD? We rose to test just below 1.57 in the European session this morning. It met with resistance at this level and I don’t expect us to push much higher. If you are buyer of USD I would consider locking in at these levels if you can. As most of you are aware after ‘Super Thursday’ the market can change direction very quickly and you can be under 1.55 in no time. Please contact myself or one of the trading to discuss your upcoming requirements.

Are you a seller of USD? I would place market orders to the downside as I think we’re due a shift lower. If you can achieve under 1.56 I would consider this as a decent level to convert at in current range bound market conditions. If you have a little more time on your hands aim for 1.55. Feel free to send me an email and we can look to implement levels to execute at for you.

GBP/EUR  

A push higher through EUR/USD has dragged Sterling lower against the Single Currency. Indeed, we sank below 1.40. Numerous people were calling 1.45 although I think that is overpriced. If you are a buyer of Euro’s look at 1.40 or above as a good level to achieve. A number of you will remember four/five years ago when achieving 1.18 was considered ‘toppish’. Of course, we all want the best possible rate at the best possible time so please do get in touch and we can implement a strategy that allows for you to gain from any upside potential through utilising a market order. Contact myself or one of the trading team.

Data wise this week we’re fairly light apart from the aforementioned UK data. Across the pond the key data released will be in the form of CPI (YoY) (July) followed by the FOMC minutes. The chances of a rate hike in September by the US Fed has diminished due to strong retail sales along with Chinese intervention in the markets so I would expect a rate rise to occur in December now. Of course, September is still a strong possibility so if you are USD buyer from GBP I would look at covering off any exposure in the next few weeks as with any rate rise we’ll see a strengthening US Dollar that, in my opinion, will drive Cable (GBP/USD) lower towards the end of the year.

If you have any questions on the above or indeed want to discuss your own individual requirements please let me know.

Have a great week

Written by Liam Alexander